This issue of OMNI’s US
Capitalism Newsletter distinctly examines the dysfunctions and the alternatives
to US
capitalism. Remember that the
defense of US capitalism—the
US
capitalist propaganda system--is backed by billions of dollars. OMNI is sitting on the high end of the
teeter-totter (as we are also on US imperialism and other issues), but at least
we are here.

The Watchdog That Didn’t Bark: The Financial
Crisis and the Disappearance of Investigative Journalism by Dean Starkman

In this sweeping, incisive
post mortem, Dean Starkman exposes the critical shortcomings that softened
coverage in the business press during the mortgage era and the years leading up
to the financial collapse of 2008. He locates the roots of the problem in
the origin of business news as a market messaging service for investors in the
early twentieth century. This access-dependent strain of journalism was soon
opposed by the grand, sweeping work of the muckrakers. Propelled by the
innovations of Bernard Kilgore, the great postwar editor of theWall Street Journal,
these two genres merged when mainstream American news organizations
institutionalized muckraking in the 1960s, creating a powerful guardian of the
public interest. Yet as the mortgage era
dawned, deep cultural and structural shifts—some unavoidable, some
self-inflicted—eroded journalism’s appetite for its role as watchdog. The
result was a deafening silence about systemic corruption in the financial
industry. Tragically, this silence grew only more profound as the mortgage
madness reached its terrible apogee from 2004 through 2006.

Starkman frames his analysis in a broad argument about journalism itself, dividing the profession into two competing approaches—access reporting
and accountability reporting—which rely on entirely different sources and
produce radically different representations of reality. As Starkman explains,
access journalism came to dominate business reporting in the 1990s, a process
he calls “CNBCization,” and rather than examining risky, even corrupt,
corporate behavior, mainstream reporters focused on profiling executives and
informing investors. Starkman concludes with a critique of the digital-news
ideology and corporate influence, which threaten to further undermine
investigative reporting, and he shows how financial coverage, and journalism as a
whole, can reclaim its bite.

[Contact the Journalism Depts. in your state to insist they
provide a good IJ program with professors committed to accountability instead
of access reporting.. At UAF (which has
not IJ program, contact Chairman Dale
Carpenter, 479-575-5216. .–Dick]

NSP Book Group - Doing Justice in an Unjust World An Invite to JOIN.

You are invited to join a brand new NSP Book group. We'll be reading the same
book and then communicating through email with each other about our
reactions. At some point we might want to make it live on a conference call
or on a Skype or G chat. And we are starting with a fabulous book,Resisting Structural Evil:
Love as Ecological and Economic Vocationby Cynthia Moe Lobeda (a professor at SeattleUniversity
). What is so powerful about this book is that it is grounded in spiritual
and religious principles yet is an amazingly powerful critique of capitalism.
Let me explain.

The everyday workings of global capitalism are endangering the
survival of the planet and perpetrating structural economic violence on many
people in the developing world.
How can flawed people like ourselves who are hopelessly entangled in
practices and institutions that perpetuate injustice and violence against the
earth (and ultimately our own children and grandchildren) possibly live an
ethically responsible, justice-promoting life?

I was introduced to this book during the recent training seminar hosted by
the Network of Spiritual Progressives in San Francisco, California I
just picked up a copy, and I invite you to do the same - then join me in an
online reading/discussion group!

It is a 300 page book, divided into eleven chapters. I would like to take our
time with it, covering one chapter a week, so we can have full, deep
discussion on the issues, concepts, and questions it presents. However, since
the discussion will all take place online, we can be as flexible as we need
to be!

We will begin discussing the following sections on Sunday, March
9th
Foreword by Larry Rasmussen xi-xii
Opening Words xvii-xix
Introduction 1-21

If you are intrigued, please email me, Amy Broyles, at northknoxamy@gmail.com.
We will set up a private email list that allows us to have an ongoing, open
conversation as we read together. Feel free to join in at anytime - it is
sure to be a rich discussion. If you can't make the first date, just
email me at a later date, once you've gotten and read the first chapter or
two. You are welcome to join at anytime.

This is a book that will inform, inspire, and can transform one's
perspective. I look forward to your reply, and to hearing your thoughts and
insights on the challenging topic that Cynthia D. Moe-Lobeda explores in this
book!

The Federal
Reserve is celebrating its 100th birthday with due modesty, given the Fed’s
complicity in generating the recent financial crisis and its inability to
adequately resuscitate the still-troubled economy. Woodrow Wilson signed the
original Federal Reserve Act on December 23, 1913. Eleven months later, the
Federal Reserve System’s twelve regional banks opened for business. But in a
sense the central bank was born in the autumn of 1907, when another devastating
financial crisis swept the nation, destroying banks, businesses and farmers on
a frightening scale.

J.P. Morgan
and his fraternity of New York
bankers intervened with brutal decisiveness in the efforts to halt the Panic of
1907, choosing which banks would fail and which would survive. Afterward,
Morgan was hailed in elite circles as a heroic figure who had saved the country
and free-market capitalism. The nostalgia for Morgan was misplaced, however: as
insiders knew, the real story of 1907 was that Washington intervened to save Wall
Street—the twentieth century’s own inaugural bailout.

When
Morgan’s manipulations failed to heal the hemorrhaging banking system, the
Morgan men turned to Treasury Secretary George Cortelyou and implored him to
send money—lots of it. The next day, some $25 million in emergency federal
deposits were sent to New York,
and the Morgan team spread the money around among the desperate banks. About
the same time, Morgan dispatched two industrialists from US Steel to meet with
President Teddy Roosevelt and get his assurance that the government would look
the other way as they executed a corporate merger likely to violate anti-trust
laws.

The
government saved the day, but it was a close call. Wall Street’s wiser heads
recognized that the country’s banking system had become dangerously unstable,
prone to reckless excess and recurring panics and depressions. Banking needed a
safety net. Leading financiers designed one: a central bank empowered to
stabilize the financial system and rescue it in times of crisis.

The bankers
not only wanted access to the Federal Reserve’s money but insisted on
controlling this new institution themselves. They pretty much got what they
wanted. The Federal Reserve Banks in twelve major cities would literally be
owned by local banks, which would function as private shareholders (they still
do). The Federal Reserve Board in Washington,
with governors appointed by the president, was a modest concession to
democratic sensibilities.

This hybrid
institution, in which private economic interests share power alongside the
elected government, was founded on an absurd pretense. Decisions at the Federal
Reserve, it was said, should be made by disinterested technocrats, not
officeholders, and deliberately shielded from the hot-blooded opinions of
voters as well as politicians. Representative Carter Glass of Virginia, a
leading sponsor, promised “an altruistic institution…a distinctly non-partisan
organization whose functions are to be wholly divorced from politics.”

Of course,
the claim was ridiculous on its face. Given the enormous size of the Fed’s
power to affect economic outcomes and people’s lives, the central bank’s
decisions inescapably favor some interests and injure others. By controlling
interest rates and the availability of credit, Fed governors necessarily
referee the conflicts between lenders and debtors. Whatever you call it, that’s
the realm of politics.

The remnant
Populists still in Congress in 1913 were not fooled by the talk of political
neutrality. Representative Robert Henry of Texas described the new central bank as
“wholly in the interest of the creditor classes, the banking fraternity, and
the commercial world without proper provision for the debtor classes and those
who toil, produce and sustain the country.”

A hundred
years later, the country seems to have circled back to the very same arguments.
We are confronted again by the financial destructiveness the Fed was supposed
to eliminate. Despite some worthy reforms that centralized power in Washington, bankers
still run wild on occasion, ignoring restraints and spreading misery in their
wake. The Fed still rushes to their rescue with lots of money—public money. And
people at large still pay a terrible price for official indulgence of this very
privileged sector.

So this is
my brief for fundamental reform: dismantle the peculiar arrangement and
democratize it. The Federal Reserve has always been a glaring contradiction of
democratic values. After a century of experience, we should be able to conclude
from events that the system simply doesn’t work. Or rather, it does very well
for bankers, but not for ordinary citizens. The economy does require a
governing authority—Fed advocates are right about that—but it suffers from the
Fed’s incestuous relationship with Wall Street bankers. My solution: throw open
the doors, let the people into the conversation and the decision-making. The
untutored ranks of citizens are as fallible as any economist, but they often
know things about economic reality well before the experts.

I know
reforming the Fed sounds improbable, especially given our dysfunctional
political system. But I have a hunch the case for reform will grow stronger,
because the pain continues for most Americans. Despite frequent assurances by
the authorities, the broken economic system has not been fixed—not by the
Federal Reserve, not by the Obama administration and certainly not by Congress.

Treasury
Secretary Jack Lew recently claimed that the Obama administration has
eliminated the specter of “too big to fail” banks. Reform-minded critics
responded with catcalls. “I’d tell him he’s living on another planet,” said
Senator David Vitter, while his colleague Sherrod Brown noted that the four
largest banks, after receiving bailout money in 2008, have grown by $2
trillion. They also enjoy below-market interest rates when they borrow from
credit markets and other banks because the investors figure Washington won’t let them fail.

Officials
tapped by the Obama administration to lead the Trans-Pacific Partnership trade
negotiations have received multimillion dollar bonuses from CitiGroup and Bank
of America, financial disclosures obtained byRepublic Repor tshow.

Stefan
Selig, a Bank of America investment banker nominated to
become the Under Secretary for International Trade at the Department of
Commerce, received more than$9
million in bonus payas
he was nominated to join the administration in November. The bonus pay came in
addition to the $5.1 million in incentive pay awarded to Selig last year.

Michael Froman, the current
U.S. Trade Representative, received over $4 million as
part of multiple exit payments when he left CitiGroup to join the Obama
administration. Froman told Senate Finance Committee members last summer that
he donated approximately 75 percent of the $2.25 million bonus he received for
his work in 2008 to charity. CitiGroup also gave Froman a $2 million payment in
connectionto hisholdingsin two investment funds, which wasawarded“in recognition of [Froman's] service
to Citi in various capacities since 1999.”

Many large corporations with a
strong incentive to influence public policy award bonuses and other incentive
pay to executives if they take jobs within the government. CitiGroup, for
instance,provides
an executive contractthat
awards additional retirement pay upon leaving to take a “full time high level
position with the U.S.
government or regulatory body.” Goldman Sachs, Morgan Stanley, JPMorgan Chase,
the Blackstone Group, Fannie Mae, Northern Trust, and Northrop Grumman are
among theother
firmsthat offer
financial rewards upon retirement for government service.

Froman joined the administration
in 2009. Selig is currently awaiting Senate confirmation before he can take his
post, which collaborates with
the trade officials to support the TPP.

The controversial TPP trade deal has rankled activists
for containing provisions that would newly empower corporations to sue
governments in ad hoc arbitration tribunals to demand compensation from
governments for laws and regulations they claim undermine their business
interests. Leaked TPP negotiation documents
show the Obama
administration is seeking to prevent foreign governments from issuing a
broad variety of financial rules designed to stem another bank crisis.

A leaked text of the TPP’s
investment chapter shows that the pact would include the controversial investor-state dispute resolution system.
A fact-sheetprovidedby Public Citizen explains how
multi-national corporations may use the TPP deal to skirt domestic courts and
local laws. The arrangement would allows corporations to go after governments
before foreign tribunals to demand compensations for tobacco, prescription drug
and environment protections that they claim would undermine their expected
future profits. Last year, Senator Elizabeth Warrenwarnedthat trade agreements such as the TPP
provide “a chance for these banks to get something done quietly out of sight
that they could not accomplish in a public place with the cameras rolling and
the lights on.”

Others have raised similar alarm.

“Not only do US treaties mandate
that all forms of finance move across borders freely and without delay, but
deals such as the TPP would allow private investors to directly file claims
against governments that regulate them, as opposed to a WTO-like system where
nation states (ie the regulators) decide whether claims are brought,”notesBoston University associate professor
Kevin Gallagher.

“Uses the Occupy
Wall Street movement as an entry point to look at
the American state apparatus, and illustrates how politics, money and media are
interwoven in the U.S.” Z Magazine (March
2014) Contact: http://vimeo.com/85091504

ALTERNATIVES TO
USE CAPITALISM

SOS: Alternatives to Capitalism

With capitalism vulnerable and out-of-step in the wake of
financial crises this book investigates the alternatives that are on
offer—including socialism, anarchism, and deep ecology. It picks its way
through the pockets of resistant thinking and emerges with paths to changing
the world that rest less on rigid ideology imposed from above than on practical
transformation from below.

Without Fear of Being Happy: Lula, the
Workers Party and BrazilbyEmir SaderandKen Silverstein. Verso40 years of radical
publishing

A
comprehensive examination of the past, present and prospects of the Workers
Party.

The Brazilian Workers Party
is the most important political formation to emerge in Latin
America for many years. Under
the charismatic leadership of an ex-metalworker and union official, Luis Inácio
da Silva, known simply as “Lula” by the Brazilian masses, the Workers Party won
31 million votes to come within three per cent of winning the 1989 presidential
election on a bold anti-capitalist platform.

Taking its
title from the Workers Party’s slogan in these elections,Without Fear of Being Happy shows
how the party’s development reflected the increasing social inequalities under Brazil’s
military dictatorship of 1964 to 1985, and gives an account of the wave of
strikes organized by Workers Party leaders which accelerated the collapse of
the generals’ regime.

Since its formation in 1980, the party has brought
together trade unionists, landless peasants, shantytown activists, the
progressive wing of the Catholic Church and human rights campaigners. Drawing
on the experiences and aspirations of this wide coalition, it has attempted to
redefine a socialist perspective in a time of triumphant neo-liberalism.

In a detailed assessment of the organization, program and
electoral prospects of the Workers Party today, Emir Sader and Ken Silverstein
highlight the dilemmas it faces as a radical political force in a country whose
economy—the eighth largest in the West—attracts keen interest from the United States.

The Workers
Party’s success has foreshadowed the emergence of leftwing coalitions in other
countries of the region and has been an inspiration for socialists throughout
the Third World. The first comprehensive
account of this remarkable political phenomenon,Without Fear of Being Happy will
be of lasting value to all those interested in Latin American politics and anti-imperialist
strategies in the era of the New World Order.

GoogleSearch,
Alternatives to US Capitalism, March 16, 2014, first page